oc | Friday 19th July
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Sort of Good Ugly

It’s Saturday 6.00pm and the results are in for the first key auction week for 2019 and also the first key measuring week for the James 100 Auction test (100 randomly chosen homes over 3 weekends Feb 23, Mar 2 & 23).

Today we covered 36 Auctions across Bayside (Bayside + Port Phillip); Stonnington and Boroondara.

And the market was:

Overall down on this time last year (February 2018) but up on the end of last year (December 2018).

Stonnington: The Feb Pep was alive and well in Stonnington with 9 from 11 selling and Biddderman approaching 2. WOW!

Bayside: Clearance was weak at just over 50% – but bidders were up on last year. Surprising!

Boroondara: Clearance was weak and bidder numbers continue to fall in Boroondara. This is the softest market by some margin in Melbourne: Two reasons – being a lot bigger, it has a lot more “crap” properties (C graders) and it rose the strongest on the back of Chinese bidding (2009-2016). Now with that demand diminishing significantly, it has had some of the biggest falls. Same ól Same ól.

OpeningStat

Only one duck auction (no bidders) in Stonnington, but a whole gaggle of them in Boroondara.

Look at the Hammer rate (sold under the hammer) – a miserable 14% – meaning 86% of auction homes sold away from putting your hand up in the street. Add to that more homes are being sold by EOI and Off-market. Can you see that buying a home is not a transparent, on-the-street process for any more than 1 in 12 homes?  More than 9 in 10 homes ARE NOT sold on the street. With prices falling who says it’s a job anybody can do? Why would you as a buyer, go up against an experienced selling agent, even if she says ‘but it’s an auction’ in this market?

This is where the above stats and market understanding can really help you (if you act correctly) – reread above Hammer rate paragraph. The numbers are telling you to engage with somebody who knows what they are doing AND who is actually working for you – on selling (selling agent) and on buying (buying agent) and buy/sell (somebody who can manage both a buy/sell agent). DIY at your own peril!

Volcanoes (4 or more bidders) – 3 of them – ok, not a great percentage, but shows if you get the bidders there, by pricing correctly, then you can have a good result. In fact, only 2 out of 36 auctions that had 2 or more bidders, didn’t sell.

It’s about Price and Quality:

0% down for A-graders to 20% down for C-graders  (down off the price peak)

= average price drop of say 10%

Example: We have been involved in six buys or buy/sells in ten days and today’s client buy was typical  – it was one of those homes which had 3 bidders, sold under the hammer, towards the top end of the quote ($2,800,000 – $3,080,000 Elizabeth Lopez) and for a price we feel hasn’t dropped on the land compared to 18 months ago.  We paid $10,000 over the underbidder and the third bidder was around 5% below that: proving good agent pricing means good bidder depth and proving by definition, our clients paid market price.

So some deeper analysis. The property was an A-grader (747/1000 and priced to market) – with 3 bidders – a good market test at 7 Bolton Avenue Hampton click thru for rating.

4 days prior to the auction we advised our clients on land being $3,300 per sqm + building improvements $500,000 + emotion 0-10% variance. The sale price of $3,020,000 was $6,000 off our estimate for a 2/3 bidder normal competitive auction ($3,026,000).

To support the “not a lot of price drop for A-Graders” – here is a James client archival record on 17 (not 7) Bolton St Hampton from 2016 which we had interest in, but didn’t end up buying. The land we valued at $3,100 per sqm in the street in May 2016. As an aside did you notice, that was a great rating 915/1000 – don’t see too many of those.

17Boltonrecords

Where you can make a “drop” argument for A-graders is emotion – maybe 18 months ago there was another 5-10% in 7 Bolton, because maybe there would have been another 2-3 bidders.

But why are some A-graders not selling?

Because they are not actually A-graders.

You need to be excellent Position, Property and Price to be an A-grader. Whilst the market hasn’t been too savage on A-graders, it certainly hasn’t gone up since 2016/17. So for “maybe” A-grade sellers who are still adding 10% on, then they are not A-graders and as they say in The Castle - they’re dreaming!

Stock Quality

The stock today, was as a whole “less than exciting”. Why poor stock?

It is a reflection of the unwillingness of quality sellers to take any quality home to the market unless they have to.

Growing , Deaths and Divorces –  are the only game in town.

The discretionary buyer and seller appear not to be watching from the sidelines, the discretionary buyer and seller appear not to be watching the market at all.

So to be clear, what are we saying about the 2019 Opening market day?

Mal, are you saying things are on the improve?

Mmmmmmm, last year in James Marketnews we described the opening market as the weakest in 5 years with a 68% Clearance and a 1.5 .

Well, 2019’s start is poorer than that (61% and 1.3)  but the market is better than late 2018 (46% and 1.2)  However, we feel this is the Feb Pep effect right now.

One week of auction reporting does not represent the overall market, which is why we review 100 auctions over 3 weeks.

Our take on the market today again:

Sort of Good Ugly

Summary of first big auction day for 2019!

1. Some buyers are still paying strong numbers – seriously if you are valuing on past results or agent speak then ……………………There was a sale in Port Phillip – OMG.

2. Mostly the homes that are selling are the ones that have experienced agents, who have been having hard conversations with their sellers early and quoting correctly.

3. If you are a buyer or a buy/seller and you have a “good money process” then, if you can find the right one, the market is for the most part kinder to you now than it was 18 months ago (A graders excepted).

Whilst we love talking about the market, because your eyeballs show you love reading when we talk about it – it’s not the bee’s knees (but don’t tell Mal)

Buying a home (well) is not so much about the market, but about your outcome.  This is a crap market (comparatively) but there are still some great outcomes. 

Volcanoes

Justin Holod - 144 Canterbury Rd Middle Park. $3,645,000 4 Bidders

Justin Holod – 144 Canterbury Rd, Middle Park.
$3,645,000, 4 Bidders.

MIDDLE PARK, 144 Canterbury Road. Justin Holod (Marshall White) Under the hammer, $3,645,000 4 Bidders

MALVERN, 4 Silver Street. Tim Derham (Abercromby’s) Under the hammer, $2,750,000 4 Bidders

PRAHRAN, 76 Andrew Street. Carla Fetter (Jellis Craig) Under the hammer, $1,695,000 4 Bidders

View all 36 auction reports here

Bayside10

Halli Moore - 5 Westley Avenue Brighton after auction $1,860,000 2 Bidders

Halli Moore – 5 Westley Avenue, Brighton. After auction $1,860,000, 2 Bidders.

MIDDLE PARK, 6 Nimmo Street. Sarah Wood (Marshall White) before auction, undisclosed

HAMPTON, 7 Bolton Avenue. Matthew Marshal (Biggin & Scott) Under the hammer, undisclosed, 3 Bidders

SOUTH MELBOURNE, 321 Bank Street. Warwick Gardiner (Greg Hocking) After auction, $2,000,000 3 Bidders

BRIGHTON, 5 Westley Avenue. Halli Moore (Buxton) Under the hammer $1,860,000 2 Bidders

BRIGHTON, 6 Clarkson Avenue. Johnny Clarkson (Buxton) After auction, undisclosed 2 Bidders

HAMPTON, 47 Linacre Road. Kate Strickland (Marshall White) before auction, undisclosed

ST KILDA, 34 Charnwood Road. Passed in $3,000,000 0 Bidders

BLACK ROCK, 65 Ardoyne Street. Passed in $2,400,000 0 Bidders

HAMPTON, 68 Teddington Road.  Passed in $2,000,000 1 Bidder

SANDRINGHAM, 17 Bamfield Street. Passed in $1,960,000 1 Bidder

HAMPTON, 12 Amiens Street. Passed in $1,950,000 2 Bidders

PORT MELBOURNE, 46 Clark Street. Passed in $1,550,000 0 Bidders

View all 36 auction reports here

InnerEast2

53-55 Narrak Road Balwyn   Passed in $4,000,000 2 Bidders

53-55 Narrak Road, Balwyn, Walter Dodich. Bought After $4,000,000, 2 Bidders.

SURREY HILLS, 15 Drewett Street. David Gillham (Noel Jones) after auction $2,098,000 1 Bidder

HAWTHORN, 8 Henrietta Street. Davide Lettieri (Marshall White) under the hammer $2,275,000 2 Bidders

KEW, 2 Banool Avenue. Brett Vanderwert (RT Edgar) after auction, undisclosed 1 Bidder

GLEN IRIS, 16 Atkins Avenue. Zali Reynolds (Marshall White) before auction, undisclosed

CAMBERWELL, 35 Russell Street. Mark Josem (Jellis Craig) before auction, undisclosed

BALWYN, 53 – 55 Narrak Road. Bought After a pass-in at $4,000,000 2 Bidders

DEEPDENE, 1B Angle Road. Passed in $2,500,000 0 Bidders

CAMBERWELL, 19 Spencer Road. Passed in $2,230,000 2 Bidders

HAWTHORN, 27 Manningtree Road. Passed in $2,200,000 2 Bidders

GLEN IRIS, 4a Atkins Avenue. Passed in $2,000,000 0 Bidders

KEW, 54 Foley Street. Passed in $1,975,000 0 Bidders

GLEN IRIS, 6 Faircroft Avenue. Passed in $1,850,000 0 Bidders

 View all 36 auction reports here

Stonnington8

1 Cloverdale Avenue Toorak John Bongiorno undisclosed 2 Bidders

1 Cloverdale Avenue, Toorak, John Bongiorno. Undisclosed, 2 Bidders.

PRAHRAN, 84 Chomley Street. Carla Fetter (Jellis Craig) After auction, undisclosed, 2 Bidders

TOORAK, 1 Cloverdale Avenue. John Bongiorno (Marshall White) After auction, undisclosed 2 Bidders

MALVERN, 53 Hunter Street. Andrew McCann (Jellis Craig) After auction, undisclosed 1 Bidder

MALVERN, 14 Pine Grove. Carla Fetter (Jellis Craig) After auction, undisclosed 1 bidder

GLEN IRIS (Stonnington), 39 Dorrington Avenue. Steven Abbott (Jellis Craig) After auction, undisclosed 0 Bidders

GLEN IRIS (Stonnington), 27A Irymple Avenue. Antony Woodley (Marshall White) After auction $2,300,000 2 Bidders

MALVERN EAST, 64 Paxton Street. Andrew Hayne (Marshall White) After auction, undisclosed 2 Bidders

MALVERN EAST, 8a Anderson Street. Passed in $2,050,000 1 Bidder

MALVERN EAST, 25 Davies Street. Passed in $1,760,000 1 Bidder

View all 36 auction reports here

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